What price does thedividend-discount model predict

Reference no: EM131021284

Colgate-Palmolive Company has just paid an annual dividend of $0.95. Analysts are predictingan 11.6% per year growth rate in earnings over the next five years. After then, Colgate's earningsare expected to grow at the current industry average of 5.6% per year. If Colgate's equity cost ofcapital is 7.8% per year and its dividend payout ratio remains constant, what price does thedividend-discount model predict Colgate stock should sell for?

Reference no: EM131021284

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